CINCINNATI, Oh. (November 5, 2018)–On the eve of the midterm Election Day, the national gas price average is at its cheapest in six months at $2.76 since April. On the week, motorists in every state but Hawaii are paying as much as a nickel less to fill-up. Today’s national average is six cents less than a week ago,15-cents less than a month ago but 24-cents more than a year ago. As demand continues to drop, gas prices could get even cheaper.
This price drop is happening at a time that analysts previously thought would likely see pump price increases due to the White House’s re-imposition of sanctions on Iran, some of which will target the country’s energy sector and impedes its ability to export oil.
However, in May, when the decision was announced (to take effect in November), the market reacted quickly with crude oil prices (WTI) spiking as high as $77/bbl this summer. At the same time, Iran’s exports began to dip. Today, they are reported to be about one million b/d less than in May while crude oil prices have stayed below $70/bbl for two weeks.
“With the market anticipating and reacting to the pending Iran sanctions throughout the summer, motorists likely have seen the worst in terms of retail prices for the year,” said Jenifer Moore, AAA spokesperson. “If the crude oil market remains steady, gas prices are likely to continue to fall as much as ten cents in the near-term.”
That being said, should any factors cause an upward shift in crude oil prices, the cheaper gas prices would likely be a temporary trend.
Motorists in seven Great Lakes and Central states are seeing some of the country’s largest month-over-month decreases when filling-up at the pump.
The cheaper monthly pump prices in Ohio (-35 cents), Indiana (-35 cents), and Kentucky (-28 cents) come as regional refinery maintenance season begins to wrap-up and are in-line with the national trend.
Ohio and Indiana also landed on the top 10 list of largest weekly decreases in the country.
The nation’s top 10 largest weekly decreases are: Ohio (-12 cents), Michigan (-9 cents), Indiana (-9 cents), Delaware (-8 cents), Oklahoma (-8 cents), Texas (-7 cents), Maryland (-7 cents), Missouri (-7 cents), Florida (-7 cents) and Georgia (-7 cents).
The nation’s top 10 least expensive markets are: Delaware ($2.44), Missouri ($2.46), South Carolina ($2.46), Oklahoma ($2.47), Texas ($2.48), Louisiana ($2.49), Mississippi ($2.49), Alabama ($2.49), Arkansas ($2.51) and Virginia ($2.52).
Oil market dynamics
At the close of Friday’s formal trading session on the NYMEX, WTI dropped 55 cents to settle at $63.14. Oil prices moved lower last week as total domestic crude inventories grew by 3.2 million bbl last week, according to the EIA’s latest weekly petroleum status report. Stocks now sit at 426 million bbl, which is 28.9 million bbl lower than the level seen at this time last year, but the highest level since mid-June. Steady growth, for the sixth consecutive week, in crude inventories has helped to check excessive increases in crude prices. Moreover, reimposed sanctions on Iran’s crude exports have not ignited fears in the market about constrained global supply this winter, since the U.S. will reportedly issue eight waivers that allow some of Iran’s top export destinations to continue importing its oil. Oil prices could remain flat or continue falling this week due to reduced concerns about a global crude supply shortage as a result of the sanctions.
AAA provides automotive, travel and insurance services to 59 million members nationwide and more than three million members in Ohio. AAA advocates for the safety and mobility of its members and has been committed to outstanding road service for more than 100 years. AAA is a non-stock, non-profit corporation working on behalf of motorists, who can now map a route, find local gas prices, discover discounts, book a hotel and track their roadside assistance service with the AAA Mobile app for iPhone, iPad and Android. For more information, visit www.AAA.com.